Cho High Court Decision 2008 Jeon 3809 (No. 24, 2009)

Reduction of or exemption from capital gains tax for substitute farmland;

Although it is argued that there has been self-defluence for not less than 3 years, it is difficult to see that the plaintiff has self-defluenced farmland in consideration of the confirmation of airline dust and village passbook, and

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed.

2. The plaintiff shall bear the litigation costs.

The Defendant’s disposition of imposition of KRW 102,646,750 for the Plaintiff on June 2, 2008 and KRW 83,103,160 for the transfer income tax for the year 2007, as well as KRW 185,749,910 for the Plaintiff is revoked.

1. Circumstances of dispositions;

A. On June 27, 2003, the Plaintiff acquired 313-13 square meters from KimA, ○○, ○○, 313-13 square meters (hereinafter “the previous land”), but on September 21, 2007, transferred 735 square meters among them to JungB, and on November 2, 2007, the remaining 587 square meters to thisCC respectively. On the grounds that he acquired 419-3 square meters prior to 419-4 and 486 square meters prior to 419-4, 2008 of the previous land, the Plaintiff made a preliminary return on the tax base for capital gains tax reverted to the Defendant in accordance with the capital gains tax reduction and exemption provisions on farmland substitute land under Article 70 of the Restriction of Special Taxation Act.

B. The Defendant, on June 2, 2008, determined and notified the Plaintiff of KRW 102,646,750, and KRW 83,103,160 of the transfer income tax reverted to the year 2007 by applying the heavy tax rate (60%) to the land for non-business, deeming that the land for the instant case was not farmland as of the date of transfer, and excluded the application for reduction of and exemption from the transfer income tax under Article 70 of the Restriction of Special Taxation Act, deeming that the land for the instant case was not farmland as of the date of transfer (hereinafter “the instant disposition”).

C. The Plaintiff, who was dissatisfied with the instant disposition, filed an appeal with the Intellectual Property Tribunal on October 15, 2008 on August 8, 2008, but the Tax Tribunal dismissed the said appeal on April 24, 2009.

[Ground of recognition] Facts without dispute, Gap evidence 1, Gap evidence 2-1, 2-2, Gap evidence 3-1, 2-2, Gap evidence 4-1, 2-5, and Gap evidence 5, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The Plaintiff cultivated the previous land from June 27, 2003 to February 2, 2007, which is the date of acquisition, as farmland for not less than three years. Since the previous land was farmland at the time of the Plaintiff’s transfer, the Plaintiff’s transfer of the previous land is subject to Article 70(1) of the Restriction of Special Taxation Act and Article 67 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 20620, Feb. 22, 2008; hereinafter “former Enforcement Decree of the Restriction of Special Taxation Act”) and is subject to reduction of 10/100 of the transfer income tax. Therefore, the Defendant’s disposition that ordered the Plaintiff to impose income tax on the transfer of the previous land is unlawful, and thus, the Defendant’s disposition that ordered the Plaintiff to impose income tax on the transfer of the previous land should be revoked.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

According to Article 70 of the Restriction of Special Taxation Act and Article 67 of the former Enforcement Decree of the Restriction of Special Taxation Act, where a person who directly cultivates farmland which is subject to agricultural income tax while residing in a Si/Gun/Gu where farmland is located for at least three years or in a Si/Gun/Gu adjacent thereto, acquires farmland of at least 1/2 of the area of the farmland transferred to large land within one year from the date of transfer of the previous farmland or at least 1/3 of the value of the farmland transferred to large land, the tax amount equivalent to 10/100 of the transfer income tax on income accruing therefrom shall be reduced or exempted.

The following facts are confirmed, i.e., the airline library taken on October 8, 2003 that part of the previous land of this case is cultivated as farmland with dry field and dry field, but the airline library taken on June 3, 2006 did not appear in the whole land of this case and appears to be in the state of miscellaneous land as a whole, ii) the previous land of this case for the above period of 15-1 through 5, Eul evidence 23-2, Eul evidence 24-2, and the whole purport of oral argument, i.e., the plaintiff was cultivated as farmland for the above period of 20-7 years, and there is no reason to acknowledge that the plaintiff had no other evidence to prove that the previous land of this case had been miscellaneous in the form of 15-2, the previous land of this case for the above period of 7 years from 00-7, the plaintiff had no reason to present a confirmation document to 20-7, the previous land of this case.

Therefore, the defendant's objection disposition is legal.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.